Stores adapt to ‘showrooming’ by welcoming smartphone-toting shoppers

‘Showrooming’

What it means: The practice of browsing merchandise in physical stores, then buying them online at lower prices.

How it happens: Shoppers go to stores armed with smartphone apps designed to identify cheaper deals online.

Retailers expecting a tepid holiday shopping season are pulling out all the stops to attract customers to their stores this year, including embracing the enemy.

Big-box stores have come to terms with “showrooming” — when shoppers go into stores armed with smartphone apps designed to identify cheaper deals online and then buy the items online — and devised new plans to offset its impact.

They are working to lure shoppers out of their homes.

“With brick-and-mortar stores, you have to pay rent, you have to pay your bills, so companies are starting to say, ‘Wait, how do you get more people in our stores?’” said Trae Bodge of
RetailMeNot.com, a website that specializes in online coupons and discounts.

Target has begun offering free WiFi in stores to help customers access the company’s mobile app and online coupons. It is also offering reviews from the technology news site CNET alongside its products on store shelves,
GigaOm.com reported. That should alleviate the need for shoppers to pull out their smartphones at all. The retailer also will match the prices of other physical stores through Dec. 24.

Walmart and Best Buy also have promised to match online competitors’ prices this holiday season.

In a call with investors last month, Best Buy’s new chief executive, Hubert Joly, said the company is focused on converting in-store browsers into buyers by offering better information from employees. “Once customers are in our stores, they’re ours to lose,” he told investors.

“We’re taking showrooming head-on,” said Amy von Walter, a spokeswoman for Best Buy. “Anytime someone comes into our store, it’s an opportunity for us to make a sale.”

Last year, Best Buy began placing company-specific bar codes on its products to make it difficult for customers to quickly scan an item and compare prices. But it estimates that about 15 percent of customers still go into Best Buy with the sole intention of checking out products they plan to buy from a competitor’s website, von Walter said. The figure is up a couple of percentage points from last year.

Experts say showrooming is on the rise. A survey by IDC Retail Insights found that about 20 percent of shoppers — more than twice as many as last year — plan to “showroom” this year.

“Retailers can’t deny it anymore,” said Renato Scaff, an executive partner at Accenture. “Amazon has taken the fight, literally, into its competitors’ stores.”

At the same time, showrooming has become easier with a proliferation of smartphone apps. In the fall,
Amazon.com released Price Check, an app that encourages customers to scan bar codes from competitors’ stores and compare prices with those on Amazon’s website. Ebay and Google have released similar apps.

“There are more apps, the apps are better, more consumers have smartphones,” said Richard Feinberg, a professor of consumer sciences and retailing at Purdue University. “Last year, it was insignificant. But this year, stores are paying attention.”

Online sales are expected to grow 12 percent this holiday season compared with last year, to as much as $96 billion. That far outpaces the 4.1 percent increase in overall retail sales expected through the holiday season, according to the National Retail Federation. Overall, online holiday sales are expected to make up nearly half of the $210 billion projected to be spent online this year.

To close that gap, retailers are increasingly finding ways to blur the lines between in-store and online shopping. Target has outfitted 20 of its most popular toys with QR codes that shoppers can scan in-store to buy the item and have it shipped directly to their homes. The Container Store is offering free in-store pickups for orders placed online. And at Kmart and Sears, shoppers can use layaway to buy items in-store and online.

Customer service is another way traditional brick-and-mortar stores, such as Best Buy with its Geek Squad technical service staff, are battling showrooming.

Not everyone prefers online shopping, though. One recent Sunday afternoon, Jesse Alston, 21, was looking for music-editing software at the Best Buy in Columbia Heights, Md. Before coming to the store, Alston, who said he prefers to buy items in-store because of security issues online, had checked out Best Buy’s website at home to ensure that the item was in stock.

“I usually check both sites: the store’s, to see if it’s available, and Amazon,” Alston said. “If it’s cheaper on Amazon, I might bite the bullet and buy it online.”